Clearstream will collaborate with Japanese bank Sumitomo Mitsui Banking Corporation (SMBU) to allow mutual customers to consolidate their Japanese government bonds (JGBs) held across both institutions into a single collateral pool.
The joint venture will allow customers to perform triparty collateral management transactions with any Clearstream collateral receiver via the Global Liquidity Hub.
While Clearstream already offers triparty collateral management for JGBs through its international central securities depositary (ICSD), the service with SMBU will now be extended to JGBs under local custody with a Japanese bank. This allows customers to keep their JGBs with the local Japanese custodian.
“The market has long been looking for ways to mobilise JGBs locally to meet the growing global demand for high quality collateral,” says Stephan Lepp, head of global securities financing, Clearstream.
“This partnership with SMBC is part of Clearstream’s extensive efforts to give our customers access to a top quality, global pool of collateral to meet upcoming regulations which will mandate increased central clearing and collateralization of derivative trades, amongst others.”
Clearstream Extends JGB Collateral Offering with SMBU Venture
Clearstream will collaborate with Japanese bank Sumitomo Mitsui Banking Corporation (SMBU) to allow mutual customers to consolidate their Japanese government bonds (JGBs) held across both institutions into a single collateral pool.
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